Tuesday, June 28, 2016

Brexit THIS!

People, I am really getting tired of all the hand-wringing, apocalyptic post-Brexit posts.  Please try to take a deep breath and chill.

It's not that big of a deal. Yes I know stock markets are down. They will come back up.

Yes the pound is down. Who give a $%#$%#$? So what?

If the UK actually exits (for me this is p = .75), economically it will be fine. The US doesn't have zero tariffs with the EU, but we still manage to survive.

This whole thing is much closer to a non-event than the earth-shaking mistake it's taken to be.

Some specific things that really bug me.

1. Claiming that the result was not democratic. Rogoff and Gowder, you both know better.  This is just ludicrous.  There is nothing more democratic than a referendum. Full stop. This was pure democracy in action. Many people who claim to love democracy but dislike this outcome are tying themselves in knots trying to avoid the implication that in this instance at least they are anti-democracy ( welcome to the club, let me show you the secret handshake).

People, the US is not a democracy! We are a Republic. We have tons of checks on democracy. Deciding everything by a simple majority referendum would be a disaster in the US. But it would be a decidedly democratic disaster.


2. Claiming that some voters have a greater right to decide than others and shouting that they were "robbed". It turns out that the youngest voters went for remain while older voters chose leave. And of course this means that the old are robbing the young and the vote is somehow illegitimate because..... old people suck? Because 18-24 year olds have so much more economic and political savvy than do 60 year olds?

I do like the idea that the shorter is your remaining life span, the less your vote should count. I wonder if the folks who are screaming about the pernicious old voters in Brexit would be willing to apply this principle to US elections?


3. Blaming Reagan. Oh Neoliberalism, is there nothing bad that you didn't do? This one is a howler of the highest order. Brexit has nothing to do with what the people who decided it said was important and was caused by Ronnie and Margie Thatcher!  Whatever you are mad about, just trot out the old shibboleths and invoke the ritual incantations. Why hasn't Naomi Klein pinned Brexit on Milton Friedman yet?

Did something happen you don't like? Look back in history,  find the first other thing that you really don't like. There's your cause.

Brexit apocalypse punditry has been some of the stupidest and laziest punditry I've had the misfortune to endure.

We will all survive Brexit with little lasting damage. This will be clear within 6 months.



Saturday, June 25, 2016

Magnetism....


Animal Magnetism: Metaphoric Cues Alter Perceptions of Romantic Partners and Relationships

Andrew Christy, Kelly Hirsch & Rebecca Schlegel
PLoS ONE, May 2016

Abstract: The psychological state of love is difficult to define, and we often rely on metaphors to communicate about this state and its constituent experiences. Commonly, these metaphors liken love to a physical force - it sweeps us off our feet, causes sparks to fly, and ignites flames of passion. Even the use of "attraction" to refer to romantic interest, commonplace in both popular and scholarly discourse, implies a force propelling two objects together. The present research examined the effects of exposing participants to a physical force (magnetism) on subsequent judgments of romantic outcomes. Across two studies, participants exposed to magnets reported greater levels of satisfaction, attraction, intimacy, and commitment.



Wednesday, June 15, 2016

The Recycling Industrial Complex

A common theme of opportunity cost:  if you use more resources to "save" something than it takes to throw it away, that's not saving.

In the North State Journal, my piece claiming that mandatory recycling is a violation of the separation of church and state....here.  It's gated, but you can register for free.

Thursday, June 09, 2016

Unloading the Dishwasher is Foreplay


The Gendered Division of Housework and Couples' Sexual Relationships: A Reexamination 

Daniel Carlson et al.
Journal of Marriage and Family, forthcoming

Abstract: Although contemporary couples increasingly express preferences for egalitarian unions, previous research has suggested that sexual intimacy decreases when routine housework is shared. Yet this research was conducted on data that are decades old. To update this work, the authors compared data from the 2006 Marital and Relationship Survey (MARS) and Wave 2 of the National Survey of Families and Households (NSFH2), collected in 1992–1994. The results indicated change in the association between housework arrangements and sexual intimacy across surveys. Although egalitarian arrangements were associated with lower sexual frequency compared to conventional arrangements in the NSFH2, no such difference was found in the MARS. In fact, reported sexual frequency increased across surveys among egalitarian couples only. In addition, how housework was arranged mattered more for sexual satisfaction among MARS couples than NSFH2 couples. These changes appear to result from the increasing role of perceived equity as a mechanism linking the division of housework to sex.

Wednesday, June 08, 2016

Sunday, June 05, 2016

David French: Can He Actually WIN?

Surprisingly, yes..

Sure, it's a long shot.  But more possible than you might think.

Or, so I claim, in the Cleveland Plain Dealer...

Excerpt:

...if the race is close, and the "third" candidate manages to take a couple of states, it's possible nobody wins a majority. The 12th Amendment would then send the election to the House of Representatives, where voting is one-state, one-vote, and the possible candidates would be restricted to the top three Electoral College vote-getters. Up until now, we have been focused on a brokered convention. But if an outsider catches fire, there might be a brokered election. Remember: The Republicans control 32 House delegations outright. If David French wins just two or three states, he could still wind up as president.

Saturday, June 04, 2016

Selfie Regard


Selfie Indulgence: Self-Favoring Biases in Perceptions of Selfies 

 Daniel Re et al. 
Social Psychological and Personality Science, forthcoming 

Abstract: People often perceive themselves as more attractive and likable than others do. Here, we examined how these self-favoring biases manifest in a highly popular novel context that is particularly self-focused - selfies. Specifically, we analyzed selfie-takers' and non-selfie-takers' perceptions of their selfies versus photos taken by others and compared these to the judgments of external perceivers. Although selfie-takers and non-selfie-takers reported equal levels of narcissism, we found that the selfie-takers perceived themselves as more attractive and likable in their selfies than in others' photos, but that non-selfie-takers viewed both photos similarly. Furthermore, external judges rated the targets as less attractive, less likable, and more narcissistic in their selfies than in the photos taken by others. Thus, self-enhancing misperceptions may support selfie-takers' positive evaluations of their selfies, revealing notable biases in self-perception. 

Nod to Kevin Lewis



Friday, April 22, 2016

The Problem with Macro in one blogpost


Apparently, Nick Rowe slipped up and wrote something about Macro in plain English. David Andalfatto was understandably quite upset and tried to fix things by adding "a bit of formalism".

Then away he goes:


There is a representative agent (this is not necessary, but makes things easy) with additively-separable log preferences defined over consumption sequences {c(t), t = 0,1,...,∞}, with discount factor β. Let R(t) denote the gross real rate of interest (risk-free) earned on a bond held from date t to date t+1. Assume that all individuals can borrow/lend freely at the risk-free rate.

and then this:

Let me consider an endowment economy where each individual is endowed with a deterministic sequence {y(t), t = 0,1,...,∞}.


OK, everybody got that. Representative agent? check. Perfect capital markets? check, lifetime income fixed and known with certainty? check. Time-separable preferences? check.

AAARRRRGGGGHHHHH!!

People, it would be one thing if models like this fit the data, but they don't.

The consumption CAPM is not an accurate predictor of asset prices, The degree of risk aversion required to make the numbers work in the equity premium puzzle is something on the order of 25 or above, the literature is littered with papers rejecting PIH.

So we are being harangued by a model that is unrealistic in the theory and inaccurate to the extreme in its predictions.

And that's pretty much modern macro in a freakin' nutshell.

Mamba out.